Many women feel like they are restricted in corporate work environments. So, what do they do? They quit their jobs and open up their own businesses. But there is just one problem. Female entrepreneurs run into a major obstacle before they can even get their doors open: they can’t access funding.
Investors Don’t Fund Them
Entrepreneurs often look to venture capitalists to invest in their business plans so that they have significant financial support. But, female entrepreneurs — especially women of color — can’t manage to get investors to help get their ideas off of the ground. The main assumption for this problem is that venture capitalists will invest in owners and causes that they can relate to. Which means if the investors are not women or POC, the entrepreneurs are likely to leave empty-handed.
Banks Offer Smaller Funds
Traditional banks are not much better. Bank approved funds for women-owned businesses are often significantly smaller than male-owned businesses. This problem is often related to the Catch-22, where female entrepreneurs don’t have enough business credit to get approved for larger amounts, but they can’t build business credit without that funding.
What Are the Other Options?
Some female entrepreneurs abandon the possibility of investors or bank funding for crowdfunding. Unfortunately, crowdfunding only works if you have a large following. You’ll have a difficult time acquiring significant funds if you’re a brand-new small-scale business.
Others will apply for government grants and funding programs designed for women-owned businesses. The problem with this is that the application and approval process takes a considerable amount of time, and there is no guarantee that your business will get chosen.
One effective option is to turn to a finance company like First Down Funding to get approved for support in a short amount of time. Entrepreneurs don’t have to wait for weeks and weeks to hear an answer. They can receive a definitive approval on the same day that they send in the application.
The best part is that this alternative funding resource isn’t restrictive. There are options for owners that have limited business credit, poor business credit and no collateral.
More and More Women Are Becoming Entrepreneurs
Statistics show that the number of women-owned businesses has grown by 114% over the course of two decades, and this upward trend isn’t going to stop.
More women are creating small to medium-sized businesses because they are frustrated with the restrictions in corporate work environments. They find that offices give them no safety nets when it comes to family planning. They’re offered short unpaid windows of parental leave before they have to return to their offices with few options for childcare.
And, if they manage to get past obstacles like toxic surroundings and subpar benefits, women still struggle to climb the corporate ladder and achieve their career goals. They often hit a glass ceiling while they watch their male colleagues have clear trajectories to corner offices. Ambitious women are trying to avoid these pitfalls by starting their own businesses, effectively becoming their own bosses.
Sadly, female entrepreneurs are left to deal with another barrier that can slow down their progress or put it on hold. Until venture capitalists and big banks learn to close this gender gap, these women will have to turn to alternative funding to achieve their dreams.